The MacNeil/Lehrer Report; Gasohol

ROBERT MacNEIL: There`s a new gas pump appearing at Midwest service stations. It`s not regular, or premium, or lead-free --- it`s gasohol, part gasoline, part alcohol distilled from corn. Is it the fuel of the future?

Good evening. Back in the Depression -- which of course coincided with Prohibition -- people in the farm states were driving cars and tractors on alcohol. Now it`s been rediscovered, and people in the same states are pushing an alcohol-gas mixture as a solution to shrinking oil supplies. The Department of Energy has proposed subsidies to develop it; the Senate wants a gasohol commission; and the House plans hearings next month. Tonight, the merits and demerits of mixing alcohol and driving: is it a good fuel alternative, or a boondoggle for farmers? Jim Lehrer is off tonight. Charlayne Hunter-Gault is in Washington.

Charlayne?

CHARLAYNE HUNTER-GAULT: Robin, gasohol made a quiet debut here in Washington yesterday when the American Automobile Association pumped it into the gas tanks of a handful of Congressmen. The demonstration coincided with the completion of a 5,000-mile test drive using gasohol, all of which was designed to bring this potential energy source to the public`s attention, if not their gas tanks. Coined by the State of Nebraska, "gasohol" is a registered trade name for motor fuel, usually blended with ninety percent gasoline and ten percent alcohol. A major purpose of this mixture is to stretch gasoline mileage. Alcohol is the key ingredient because it can be made easily from renewable products. One such alcohol fuel -- ethanol, for example -- is produced from growing plants or wastes like husks and stalks, or food wastes like potato peelings. The other type is methanol, or wood alcohol, that can be made from wood, sewage, garbage, coal, natural gas, tar or petroleum. Robin?

MacNEIL: The prime impetus to develop gasohol as a gasoline supplement has come from the farm belt -- states such as Nebraska, Iowa and Illinois, which face a continuing surplus in agricultural production. Gasohol has been making some inroads in Illinois, where the state`s Department of Agriculture is encouraging its development. Some thirty-three Illinois service stations sell gasohol, made up of nine parts gasoline to one part alcohol, selling for anywhere from sixty-nine to seventy-six cents a gallon. Reporter Monica Hoose asked Pleasant Plains service station owner John Holmes about his involvement with this new product.

JOHN HOLMES, Gasohol Dealer: I originally got involved in it with the request of my Congressman, Paul Findley, when he started this gasohol program and he needed someplace to put it to the public as a retail item. And we started this almost a year ago, and we marketed it right at the first of January; and we`ve been marketing it at the retail level since January.

MONICA HOOSE, Reporter: And how are sales going?

HOLMES: Well, they`re doing very well. I had three items for sale; I had the ethyl gasoline at that time, the no-lead, and regular, and I substituted gasohol for the ethyl, and the gasohol is about ten percent above what my ethyl sells for.

NOOSE: Do you have any complaints from your customers?

HOLMES: None, as far as that is concerned. You just can`t tell any difference as far as the functioning of the automobile; except that we don`t get the so-called no-lead "ping," it is enhancing the performance quite considerably and the mileage is about (inaudible) percent on the average.

GLEN BRANDT, Gasohol User: We got started using gasohol through our local Congressman, Paul Findley -- he had an experiment on it and I got interested in it, and then got our local oil jobber here to start handling it. And we`ve run some experiments on some small engines before we got into our larger engines, and it looked very promising. And the main reason I did it was because it`s a grain derivative, or agricultural derivative alcohol, and Lord only knows, we`ve got a surplus of grains in this country and than seemed like it would be a good outlet for it.

NOOSE: Since you`ve been using gasohol have you noticed any difference in your car`s performance?

BRANDT: Well, I think my performance has been superior. It starts better, particularly in cold weather, and in hot weather it`ll kick off a lot quicker. My gas mile age has been somewhat improved, but not as good as I`d hoped to be; it`s been a little disappointing. On the three checks I`ve made with it I got about a 0.8, a little less than a one-mile-per-gallon increase.

WILLIAM DEUTSCH, Illinois Petroleum Marketers Association: The major problems with gasohol probably is the dedication of pumps, tanks, and even pipelines eventually, to move the product, because it cannot be contaminated with either no-lead or regular or ethyl gasoline; it`s an entirely different product, it must be handled in a different way. It`s something that is fairly new, so that we`re even experimenting with it right now to see the best ways to handle it in certain instances. In regards to pumps, Monica, you have to be very careful that you have a fairly recent model pump because the parts must be teflon or some other similar alloy that will not be affected by the alcohol, because there`s no lubrication in gasohol, absolutely none. The best way to explain it, as I had it explained to me by somebody from the Department of Agriculture, is it`s like an extra, extra, extra dry martini; it is that dry. And therefore you have no lubrication so you have to be very careful how it`s handled.

NOOSE: Can gasohol be competitive price-wise with gasoline?

DEUTSCH: The problem you have is the cost. The cost is now still considerably higher than a gallon of even premium no-lead. I think it would be probably three to five cents higher right in this area here; I don`t know what it would be in some of the other areas. And the reason is that we have not found a way to produce alcohol cheap enough yet. Now, we have had it told to us, if they get into mass production they can cut the price of the alcohol, or ethanol, as they call it, down considerably; and when they do that, then the price of the product would drop. Because remember, you`ve only got ten to fifteen percent alcohol in the gasoline; it`s that last ten to fifteen percent that`s causing the cost difference.

MacNEIL: Mass production of alcohol from grain products began this past May, at the Archer, Daniels Midland plant in Decatur, Illinois. The plant was primarily designed to product grain neutral spirits for the beverage industry, alcohol which ADM`s alcohol manager, James Reynolds, says would work as fuel in gasohol.

JAMES REYNOLDS, ADM Marketing Manager: We are making alcohol at this time that is comparable to any other fuel. I think it is here to stay, and I think we can do it in the future more economically. The distillation process has gone from the little Snuffy-Smith still to a continuous still, which is eighty or so feet tall. The stills are in series, stainless steel stills, instead of the old copper coiled still.

HOOSE: About how much energy does it take to produce?

REYNOLDS: It takes about 56,000 BTU per proof gallon. A proof gallon is a fifty percent wine or true gallon alcohol.

HOOSE: How expensive is it to make alcohol?

REYNOLDS: It might be expensive to make alcohol outside this plant, but in this plant we use the starch from wheat and corn which has had the oil and protein extracted.

We use this by-product as the feed to make alcohol, and therefore it`s considerably cheaper in this plant than it would be in a conventional distillery.

MacNEIL: ADM`s vice president, Richard Burket, talked about the cost of alcohol production.

RICHARD BURKET, Archer, Daniels Midland Company:

The largest expense in the production of alcohol would be the cost of the grain itself, and then after that you will probably have the expense of the energy for the conversion into alcohol; but far and away the largest cost is the cost of grain.

HOOSE: About how much energy is needed for the conversion?

BURKET: Well, right now it`ll take you more BTUs to produce an alcohol than you would receive if you burned that alcohol as a fuel. In other words, in excess of 100,000 BTUs to produce a gallon of alcohol today, of the quality of alcohol we are producing.-which, I would like to add, could be a quality highly superior to what you might need for gasohol if we knew more about gasohol.

MacNEIL: Within the state government opinion is divided about gasohol. One of those asking hard questions is Marvin Nodiff, Illinois Director of Energy.

MARVIN NODIFF, Illinois Director of Energy: Gasohol is a promising solution, it is not the solution. It has many problems to it that I think need to be addressed. First would be that it may have a negative energy balance in that it will not result in a net saving, it will not result in a net accomplishment of independence from foreign fuel. Secondly is added, it would need a subsidy based on current market situations, and this involves the entire pricing situation for controlling products in this country. And third, I think, is an important element in that if we subsidize this type of program, are we subsidizing an energy program or a farm program; and if we choose to subsidize a farm program, should we do it in this manner, is this the best thing to do?

JOHN BLOCK, Illinois Director of Agriculture: Gasohol is a potential new market for farm products, not just necessarily the grain that you might harvest off this corn field this fall but also perhaps the residue, the stalks that you see on the ground -- they`re wasted here now -they can be made into alternate forms of energy also. In the State of Illinois we raise a billion bushel of corn a year, and right now this year the federal government has a program designed to take up to as many as twenty percent of our corn acres out of production. And this is 240 million bushel of corn, and that much corn -- the amount that we`re being asked to set aside and not raise -- is enough corn to satisfy ten percent of the fuel needs in the State of Illinois. In agriculture, whenever we can sell some thing that we`re raising, it`s a potential profit to farmers; and there`s no question but what we need more profits.

HUNTER-GAULT: The man most responsible for spreading the gasohol word throughout Illinois is Al Mavis.Mr. Mavis is the, Farm Energy Conservation Coordinator for the Illinois Department of Agriculture. Mr. Mavis, why are you so high on gasohol?

AL MAVIS: Well, as you can tell, I have some age on me, Charlayne, and probably since Pearl Harbor it`s the only thing I`ve seen that`s been good for all of America. It`s the kind of a product -- we certainly need an alternate fuel -- but it`s the kind of a product that has so many side effects. For instance, as I watched the comment of Director Block talking about the 240 million bushel of corn that we`re being asked not to produce, that makes enough for 600 million gallons of alcohol. If you took the millions of dollars we`re paying Illinois farmers this year not to produce -- and I`m a farmer -- and converted it to alcohol and simply took the alcohol price, we`d kick $900 million of new wealth into Illinois this year. And when we stop importing foreign oils at the rate of five million dollars an hour by any means and the American dollar becomes stronger, we`ll be able to do some of the things we need to do down around the country. You know, we`re country folks and we don`t really know about BTUs. I get a little lost in all the technical thing.

But last November a group of people in Illinois decided that if Illinois agriculture was going to survive, it had to look for a source of alternate fuels, because in 1973 we had farmers shut down because we were out of fuel because of the OPEC situation. We started an energy conservation program that`s been very successful, because we found that we can save one gallon or one trip to the acre, that`s twenty-four million gallons; and we might do that, and we`ve done that. And we might even save two gallons, and that might get us -- but that`s only a little bit of what Illinois agriculture takes to produce the 1.2 billion. So we looked around to find some other way to conserve fossil fuels; we`re not conserving fuel, we`re conserving fossil fuel. And we found that we can substitute ten percent agriculturally derived alcohol into the fuel systems of the power units as we know them and successfully replace ten percent of foreign oil. And these things are of great essence to every body.

HUNTER-GAULT: Is it catching on?

MAVIS: Well, it must be catching on. We started at the first station in November; a very aggressive lady Congressman, Geo-Karis, in Illinois introduced the first alternate energy bill in the House in Illinois. And from that time on she opened the energy meeting in the Chicago area in November with the pouring of alcohol into her own car and driving the TV crew down the street; and it worked successfully. And from that station we went to three, and then to twenty-three and then to twenty-six and now to thirty-three. And the thing about it is, you must understand, the Illinois Department of Agriculture does not own alcohol and does not own petroleum. We`re simply looking down the road to make sure that we have enough fuel to keep alive as the thing goes on.

HUNTER-GAULT: Isn`t this product, as was raised in the film, too expensive to be practical?

MAVIS: Well, you overlook the key to the thing. We`re only using one tenth of it. The economics are this: one tenth of a gallon of fuel plus nine tenths comes out to somewhere in the sixty-one or sixty-two cent bracket total fuel cost today, alcohol included. And when you add a profit and the handling, you`re in the 72-77.9 bracket; that`s in the same price as no- lead. And it`s a premium fuel, and yet it`s ten percent of fossil fuel that we never used -- renewable; ten percent that we didn`t have to send the money overseas for; it burns without the use of tetraethyl lead, eliminates an EPA problem; it employs people in America; it takes an agricultural surplus that`s killing us and turns it into dollars instead of storage; it`s that Pearl Harbor we`ve needed.

HUNTER-GAULT: All right, thank you.

MAVIS: Thank you.

HUNTER-GAULT: Robin?

MacNEIL: As bright as the future of gasohol may sound to some, others question how much it helps solve either vanishing energy supplies or farm surpluses. Chevron Research Company has been one of gasohol`s most outspoken critics. As assistant to the president of the company, Robert Lindquist has been working in the field of synthetic and alternative energy sources for nine years. Mr. Lindquist, is gasohol a good fuel?

ROBERT LINDQUIST: It`s not as good as gasoline, Robin. Gasohol is being attempted to be forced on us, the motoring public, by legislation insisting that suppliers of gasoline fuel have so much gasohol available; and it`s not good for your car, your pocketbook or the energy balance.

MacNEIL: Well, let`s go back. Why isn`t it as good as gasoline?

LINDQUIST: Cars are built to run on gasoline. They have components in there that are designed to resist gasoline`s attack, not designed to resist alcohol attack.

MacNEIL: Could cars be modified for it?

LINDQUIST: Cars could be modified, but the hundred million cars we have out there are based on running on gasoline; they`re going to have problems with alcohol, and we`ve demonstrated, it`s been demonstrated in a number of places.

MacNEIL: What does the percentage of alcohol in this gasohol product actually do to cars that is harmful?

LINDQUIST: The usual effect is to cause swelling of the rubber seals as discussed in the pumping part in the previous videotape; you have problems, particularly with wood alcohol, with corrosion of your fuel tank and with the metal parts in the carburetor bowl.

MacNEIL: Is it as efficient as gasoline in terms of its combustibility and so on?

LINDQUIST: No. There are two different alcohols. Wood alcohol is only half as efficient; grain alcohol is only two-thirds as efficient, so you have to have more in your car to get the same mileage.

MacNEIL: Doesn`t gasohol decrease pollution, as we`ve just heard?

LINDQUIST: No. The EPA and the California Air Resources Board both have run tests, say that there`s no advantage in using gasohol versus gasoline. You still need catalytic mufflers.

MacNEIL: Now, you work for an oil company. Wouldn`t people expect you to say that you don`t like a product that isn`t petroleum-derived?

LINDQUIST: No, because we look at a variety of sources. We`re working with coal, shale oil, and we spent three years looking at alcohol, trying to make it work. Our conclusion was that it was not good for the car, it was far too costly -- it cost three to five times what gasoline costs. The Department of Agriculture commented that if it was subsidized by the taxpayer it would cost us, the nation, ten billion dollars a year to subsidize gasohol across the country as well as increase the price of steak and so on.

MacNEIL: What do you -- increase the price of steak?

LINDQUIST: Yes.

MacNEIL: How?

LINDQUIST: Because by subsidizing gasohol you`d be raising the price of grain, and the cost of meat products would go up. This is the Department of Agriculture`s analysis.

MacNEIL: Well, what do you say to this question of whether the impetus behind gasohol is primarily a farm program or an energy program?

LINDQUIST: Well, it`s obviously a farm program, because as an energy program it`s a loser. To get ten miles in your car with alcohol you have to burn about the equivalent of fifteen miles of fuel oil. So most of these distillation plants use fuel oil and it`s not a net energy producer, it`s an energy loser. We`ll have to import more fuel oil to distill the alcohol.

MacNEIL: Gee, Mr. Mavis, Mr. Lindquist disagrees with just about everything you say. How do you answer some of those -- first of all, that it actually harms the cars?

MAVIS: Well, that`s an interesting point, because we being country folks, I told you, we don`t know anything about the laboratories or anything like that; we simply knew that we put it in the cars and we`ve driven now in -- as I told you, we`re up to thirty-three stations starting the first of July with twenty-six running. Illinois ran eleven old state cars without modification, ran them through the same computers under the care of the administrative services, and in 90-day tests documented a 6.1 increase in mileage, a thirty percent reduction in hydrocarbons and a seven percent reduction in carbon monoxide. Germany recorded the same thing, Nebraska recorded the same thing. And the thing about it is, outside of one old rusty truck whose tank had a lot of rust in it, I can`t think of the first car that had any problem. I drive a car with 80,000 miles on it, and the mileage on it went up twenty-five percent.

MacNEIL: This sounds fairly solid evidence, Mr. Lindquist.

LINDQUIST: Stick with it, Al. We tried that for the first three months in our experiments; it looked great and we put it in the company president`s car. I had to go over and bail him out when he was in a foggy day in San Francisco when it stalled. It`s the effect of time.

MAVIS: Let me ask you a simple question, Dr. Lindquist. Was it methanol or ethanol?

LINDQUIST: The experiment I`m talking about happened to be wood alcohol, methanol.

MAVIS: That`s great. You see, gasohol is ten percent agriculturally derived ethanol. Now, you`re getting the subject mixed up, Lindquist, and this is the problem we`ve had with (unintelligible) and everything else.

You people get the two products mixed up. Gasohol is ten percent agriculturally derived ethanol and ninety percent gasoline. Now, I`ll guarantee you with wood alcohol you`re going to have lots of problems. You`ll have gasket problems, you`ll have phasing problems, you`ll have all the things you`re talking about and your car will quit. And I`ll guarantee if you`ll run the same honest test with ethanol that you did with methanol, you`ll be on my side the next time we appear on this program.

MacNEIL: What do you say about that?

LINDQUIST: There are two different alcohols, and ethanol is less of a problem but still a problem. Brazil has been marketing ethanol in gasoline for over twenty years; all the cars in Brazil have to be modified to accommodate ethanol in gasoline.

MacNEIL: But did the objections that you raised a moment ago apply to the ethanol which is the ingredient in the gasohol that we`re talking about?

LINDQUIST: Yes. You are going to have those problems, to a lesser degree; you`ll still have the problems. In a fleet of a hundred million cars, if you only have one percent having the problem that`s a million cars out there on the road that are potential stalling, hard-starting, and so on.

MacNEIL: Wouldn`t it make sense, if this were a real way of cutting down on petroleum imports and the use of dwindling supplies of petroleum, to modify a great many cars or to build new ones that could burn alcohol?

LINDQUIST: Yes. But as I mentioned, and I think the previous film clip showed, it`s not a net energy saver; it costs more petroleum energy to produce gasohol than you`re saving by putting it into the gasoline.

MacNEIL: What do you say to that argument, Mr. Mavis, that it`s not a net energy saver, that it costs more in energy to make it than it produces? I mean, even as a country boy that must be a.... (Laughing.)

MAVIS: Even as a country boy. You missed the whole point because you didn`t understand what the people in Archer, Daniels Midland said. You didn`t understand about some of the things that are going on. They are taking the food and they`re taking out the protein and the goodies, and what`s left is starchy waste that has been a problem. We in Illinois, before Archer, Daniels Midland were able to get their new plant on the line, which they said was in May and is correct, started deriving cheese alcohol in November made from the whey left after they`ve made the cheese. Now, do we charge the energy in the cheese to the alcohol or do we charge the ninety percent or the hundred percent or the eighty percent that belongs to the cheese? How much of the energy we are consuming in ADM should we charge to the human food industry, and then how much should we charge to the product that they were dumping in the sewage systems? You`ve got this same problem with sweet potatoes and potatoes. We`re long starch, we`re not long protein in the world. I can sell protein anywhere in the world, but I can`t sell starch.

MacNEIL: Okay. Let`s move on. Charlayne?

HUNTER-GAULT: The federal government is beginning to feel the heat from gasoholics. Meanwhile, last month, the Department of Energy proposed a plan to subsidize oil companies that develop synthetic fuels, including gasohol. As chief of the department`s Alternative Fuel Branch, Gene Ecklund is responsible for finding fuels that can replace petroleum used by motorists. Mr. Ecklund, how do you feel about gasohol?

GENE ECKLUND: Well, obviously, from what we`ve heard here today, this is a controversial subject and I think that we`re seeing the two extremes of this situation. One of the factors is that we in the Department of Energy and its predecessors have been looking for alternatives for petroleum for several years, and one of the questions that comes up relates to when we might need the fuels. Mr. Lindquist, I think, is looking at it from the point of view of what the best approach might be if we have a lot of time. I think Mr. Mavis and others represent a point of view that says we need to do something now, let`s get on with it. And there is certain validity to both of these positions.

HUNTER-GAULT: Well, what kind of emphasis is your department putting on gasohol? Do you want to get on with it?

ECKLUND: Well, I don`t think all of the data is in yet, so we kind of take a middle-of-the-road approach, I think, at this particular time. No one really knows what the ultimate is going to be, and one of the situations that we have is that we don`t have enough data really to answer all of these questions. I think a lot of the facts and the figures that have come out today are those that come about from approaching things on a traditional basis; and we haven`t really set our sights on a proposition of how well we can do, and this may indeed influence the situation.

HUNTER-GAULT: How fast do you think you can make a determination in this area?

ECKLUND: The Department of Energy has a program going on right now to look at the various aspects of commercialization, all of the things that need to be done; and in addition to just looking at the alcohol ones they are looking at the other liquid fuels options as well. It is anticipated that about the end of this calendar year the Department of Energy will arrive at a point of coming up with a position as to what the role might be.

HUNTER-GAULT: Some people have criticized this program, as you saw in the videotape, that it`s a farm subsidy program and not an energy solution. How do you respond?

ECKLUND: Well, to a certain extent that`s true. However, I think if we look for the synergistic aspects of things, there may be cases where that situation isn`t necessarily true. If we can use waste...

HUNTER-GAULT: The synergistic aspects?

ECKLUND: Well, if we can use waste products for our feedstock to bring the cost down, if we can use energy sources that aren`t being used now or energy which is wasted right now in some of our processes and use it to apply to making the alcohol, we can help ourselves out in some of these things. I think that the situation here is that there are some niches in which this might well be applicable today, and I think maybe Mr. Mavis is in a situation of finding some of them.

HUNTER-GAULT: Thank you. Let`s just pursue the question for the moment of whether or not it`s realistic to expect that we can develop in this country an energy alternative that`s going to cut down significantly on our dependence on foreign oil supplies.

ECKLUND: We have a big job ahead of us because this country uses an enormous amount of fuel. If we in this country decided. today that we were going to get on with a very, very concentrated program to try and replace petroleum, we would probably have our hands full getting to the point of replacing five percent of our gasoline by about 1990, and we could maybe get to about ten percent by the year 2000.

HUNTER-GAULT: Okay. Mr. Lindquist, how do you feel about that? How soon do you think we are?

LINDQUIST: I think the key point in this whole discussion is that you don`t have to feed your car fuel from grain; you can feed it fuel from rocks, and Mr. Eckland alluded to that -- oil shale, coal; those are rocks, they`re not foodstuff -- you can do that at far less cost and at much better performance than you get by converting feedstuffs at a very high cost into fuel.

HUNTER-GAULT: All right. Mr. Mavis, do you think gasohol, in light of what you`ve just heard, is the fuel of the future?

MAVIS: I think it`s the fuel of the day; it`s here now, it`s not down the road. The very things that Lindquist talks about are very expensive and very far down the road. We just see where Mobil got fifteen million dollars to work on a pilot plant where they hope to get a hundred barrels of a product that costs forty cents a gallon more than it does now, by 1982. We can turn out that much product in just a few hours in the plant in Decatur, Illinois.

HUNTER-GAULT: Thank you very much. Robin?

MacNEIL: Yes. Thank you, both gentlemen in Washington. Good night, Charlayne.

HUNTER-GAULT: Good night, Robin.

MacNEIL: Thank you, Mr. Lindquist. That`s all for tonight. We`ll be back tomorrow night. I`m Robert MacNeil. Good night.